Definition The interest rate is the amount of interest due per period, as a proportion of the principal (the amount lent, deposited or borrowed). It consists of the percentage expression of the portion of the principal that the lender charges to the borrower as interest. The entity of the sum that the borrower will have to pay as … Continue reading What are Interest Rates?
By studying past returns of bonds with different maturities it is clear that although they generally move together, interest rates of different categories of bonds tend to differ from one another in any given year, and the difference between the interest rates varies over time. Being able to understand why interest rates differ from bond … Continue reading What determines the risk structure of interest rates?
Economic growth, which consists in an increase in the production of economic goods and services compared from one period of time to another, and is measured by the change in GDP (Gross Domestic Product), is probably the main aspect on which we focus when talking about economics and the goals of government policies. This happens … Continue reading Productivity is the Key to Long Term Economic Growth
Technological innovation: Definition Technological innovation is a fundamental component of progress and is the main determinant of human development. It can be defined as "a process of broadening human possibilities, enabling individuals to enjoy a long and healthy life, to be educated and to have access to the necessary resources at a dignified standard of … Continue reading Sources and Dynamics of Technological Innovation
In Economics, factors of production are those components used in the production process for the creation of finished goods and services. The link between the quantity of individual inputs and the quantity of product obtained (output) is expressed by the production function.The factors of production that are traditionally identified in economic theory are land, capital, … Continue reading The Factors of Production
Introduction In finance, bonds are instruments of indebtedness of an issuer to the holders, under which the issuer owes the holders a debt and an interest (the coupon) or to repay the principal at a later date (maturity date). In other words, a bond is a form of loan where two entities act: the creditor … Continue reading The Bond Market
In Economics, money is defined as anything that is generally accepted as payment for goods or services or in the payment of debts. Anyway, no matter the form that money takes, whether we are talking about paper money, gold, or checking account deposits, it has three primary functions, it is first and foremost a medium … Continue reading History of Payment Systems and Money
Inflation consists of a sustained increase in the general price level, and it can have different causes. Inflation can be Demand-pull when increasing demand from consumers leads to an increase in prices, or Cost-push when higher supply costs lead to higher prices. Demand-pull inflation The most common cause of rising prices and therefore of inflation … Continue reading What causes inflation?
Introduction As we have seen by analyzing the law of demand and supply, it is very important to understand how demand and supply behave with respect to one another and with respect to the economic environment. In this case, we will analyze how asset demand is determined. In the first place, it is important to … Continue reading How is asset demand determined?
What is money? In Economics, money is defined as anything that is generally accepted as payment for goods or services or in the payment of debts. This definition immediately highlights the fact that even though when we think of what money is, we usually tend to refer to currency (paper bills and coins), it is … Continue reading The Functions of Money